Feinberg: Claims large and small get same scrutiny as process moves to final phase

Ken Feinberg addresses questions from local residents and business owners during a meeting at the Orange Beach Community Center on July 30, 2010, about how his Gulf Coast Claims Facility will operate. (Press-Register/Kate Mercer)

MOBILE, Ala. -- After being criticized for treating large and small claims differently during his emergency payment process, oil spill claims czar Ken Feinberg said this week that all applications for final damage compensation will receive equal scrutiny.

Feinberg’s Gulf Coast Claims Facility has confirmed that it used a different review process for claims of more than $500,000 during the early stages of the process. That drew the ire of Alabama officials because the extra scrutiny for larger claims often resulted in them being paid at just a fraction of their reported loss.

Feinberg has since reviewed many of the larger claims, and said this week that he plans to make supplemental payments in most cases.

He told the Press-Register that it was necessary to give less scrutiny to smaller claims during the emergency phase in order to process in a timely manner the 466,000 applications filed.

“People wanted their money,” he said. “If I did that type of full-fledged review of every business claim of $25,000, people would be waiting months for their checks.”

Feinberg said that if his adjusters applied the same level of review to the smaller claims, many of those payments also would have been reduced.

The Gulf Coast Claims Facility finished processing emergency claims Wednesday, according to officials there. The claims process is now in a final compensation phase that will run through August 2013.

“Now you’ve got to treat them all the same,” Feinberg said. “The methodology must be the same, and we need to have more transparency so people know why we’re deciding what we’re deciding.”

The final claims process offers three options:

Any of the 168,000 people who were approved for emergency payments can get a quick, no-proof-necessary final check of $5,000 for individuals or $25,000 for businesses. In exchange, they must sign a liability waiver for any company involved in the spill and agree not to come back to the claims process for more money.

Anyone can apply for a one-time payment covering all present and future economic damages caused by the spill. Feinberg’s operation will review financial documentation and consult with experts about the future impacts of the spill to decide what that payment will be. If the claimant accepts the check, a liability waiver will be required, and any money they have received in earlier payments from either Feinberg or BP PLC will be deducted.

People who don’t want to sign a waiver can apply for quarterly interim payments for as long as the claims facility is in operation. They must supply financial documentation to demonstrate continuing losses.

Feinberg said he hopes many small claimants take the first option so that his adjusters have time to review all the other claims. By law, he has to offer people a payment within 90 days of their application or they can appeal to the U.S. Coast Guard.

Feinberg’s operation has given out more than $2.5 billion since it took over paying damages to individuals and businesses on Aug. 23. Alabama claimants have received $413 million, with another $208 million going to Mississippi. 